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Appendix C - Dow Chemical Financial Ratios

Solvency Ratio

a. Working Capital = Current assets – Current liabilities

2014 24,267,000 - 11,593,000 = 12,674,000

2013 24,977,000 - 11,971,000 = 13,006,000

2012 23,684,000 - 11,493,000 = 12,191,000

b. Current Ratio = Current assets/Current liabilities

2014 24,267,000/11,593,000 = 2.093

2013 24,977,000/11,971,000 = 2.086

2012 23,684,000/11,493,000 = 2.061

c. Acid Test Ratio = (Cash + Marketable Securities + Current receivables)/Current liabilities

2014 (4.6B + 0.025 + 5.2B)/11,593,000 = 2.093

2013 (3.03B + 0.23 + 5.08B)/11,971,000 = 2.086

2012 (4.32B + 0.22 + 4.8B)/11,493,000 = 2.061

d. Accounts Receivable Turnover = Net Sales/Average accounts receivables

2014 58,167/4,685 = 12.42

2013 57, 080/4,935 =11.57

2012 56,786/5,074 = 11.19

e. Inventory Turnover = Cost of goods sold/Average inventory

2014 47,464, 000/8,670,000 = 5.475

2013 47,594,000/9,157, 000 = 5.198

2012 47,792,000/9,318,000 = 5.129

f. Days Sales in Receivables = (Accounts receivable/credit sales) x 365

2014 (8,670,000/47,464, 000) * 365 = 66.67

2013 9,157, 000/ 47,594,000) * 365 = 70.21

2012 9,318,000 / 47,792,000) * 365 = 71.16

g. Days Sales Inventory = (Ending inventory/cost of good sold) x 365

2014 (8,670,000/47,464, 000) * 365 = 66.67

2013 (9,157, 000/47,594,000) * 365 = 70.21

2012 (9,318,000/47,792,000) * 365 = 71.16

h. Debt to Equity Ratio = Total liabilities/Total stockholders’ equity

2014 46,171,000/22,423,000 = 2.059

2013 42,447,000/26,898,000 = 1.578

2012 48,581,000/26,898,000 = 1.806

i. Times Interest Earned = (Net income + Interest expense + Income Taxes)/Interest expense

2014 3,839,000 + 1,108,000 + 1,426,000 = 6,373,000

2013 4,816, 000 + 1,179,000 + 1,988,000 =7,983,000

2012 1,100,000 + 1,353,000 + 565,000 = 3,018,000

Performance Ratios

a. Asset Turnover = Net sale/Average total assets

2014 0.845 = 58,167, 000/68,796,000

2013 0.82= 57,080,000/69,501,000

2012 0.82 = 56,786,000/ 69,605,000

b. Return on Sales = Net income + Net-of-tax interest expense)/Sales

2014 0.199 = (5,265, 000 + 3,839,000)/ 47,464, 000

2013 0.244 = (6,804,000+4,816, 000)/ 47,594,000

2012 0.057 = (1,665,000+ 1,100,000)/ 47,792,000

c. Gross Margin Ratio = (Net Income - Cost of goods sold)/Net Sales

2014 (3,839,000 - 47,464, 000)/58,167,000 = -0.75

2013 (4,816, 000 - 47,594,000)/57,080,000 = -0.75

2012 (1,100,000 - 47,792,000)/56,786,000 = -0.82

d. Return on Assets = Net income + Net-of-tax interest expense)/Average total assests

2014 0.132 = (5,265, 000+ 3,839,000)/68,796,000

2013 0.167 = (6,804,000 + 4,816, 000)/69,501,000

2012 0.039 = (1,665,000+ 1,100,000)/69,605,000

e. Return on Equity = Net Income/Average stockholders’ equity

2014 3,839,000/ 22,423, 000 = 0.17

2013 4,816,000/ 26,898, 000 = 0.18

2012 1,100,000/20,877,000 = 0.0526

f. Average Interest Rate = Interest expense/Average total liabilities

2014 0.0213 = 983,000/46,171,000

2013 0.0259 = 1,101,000 /42,447,000

2012 0.0261 = 1,269,000/48,581,000

g. Book Value per Share = Shareholders’ equity of common shares/Number of common shares outstanding

2014 0.02 =22,423,000/1,157,695,055

2013 0.022 = 26,898,000/1,215,829,233

2012 0.017 = 20,877,000/1,204,364,155

h. Earning per Share = Net income/Average number per common share outstanding

2014 3,432,000,000/1,157,695,055 = 2.96

2013 4,447,000,000/ 1,215,829,233 = 3.66

2012 842,000,000/1,204,364,155 = 0.70

i. Price Earning Ratio = Market price per common share/Earning per common share

2014 49.44 ÷ 2.96 = 16.68

2013 46.71/3.66 = 12.76

2012 32.16/0.7 = 45.94

j. Dividend Yield = Cash dividends per common share/Market price per common share

2014 0.53 = 26.20/49.44

2013 0.35 =16.35/46.71

2012 1.7 = 54.67/32.16

k. Dividend Payout = Cash dividends per common share/Earning per common share

2014 8.85 = 26.20/2.96

2013 4.48 =16.35/3.66

2012 77.14 = 54.67/0.7

Appendix D: BASF Financial Ratios

Solvency Ratio

a. Working Capital = Current assets – Current liabilities

2014 24,267,000 - 11,593,000 = 12,674,000

2013 24,977,000 - 11,971,000 = 13,006,000

2012 23,684,000 - 11,493,000 = 12,191,000

b. Current Ratio = Current assets/Current liabilities

2014 24,267,000/11,593,000 = 2.093

2013 24,977,000/11,971,000 = 2.086

2012 23,684,000/11,493,000 = 2.061

c. Acid Test Ratio = (Cash + Marketable Securities + Current receivables)/Current liabilities

2014 (2.28B + 0.02625 + 19.61B)/21.13B= 1.04

2013 (2.33B + 0.2186 + 16.73B)/19.04B = 1.01

2012 (2.29B + 0.2958 + 17.54B)/22.29B = 0.90

d. Accounts Receivable Turnover = Cash + Marketable Securities + Current receivables/Current liabilities

2014 58,167/4,685 = 12.42

2013 57, 080/4,935 =11.57

2012 56,786/5,074 = 11.19

e. Inventory Turnover = Cost of goods sold/Average inventory

2014 47,464, 000/8,670,000 = 5.475

2013 47,594,000/9,157, 000 = 5.198

2012 47,792,000/9,318,000 = 5.129

f. Days Sales in Receivables = (Accounts receivable/credit sales) x 365

2014 (10.39B/48.36B) * 365= 76.84

2013 (10.23B/53.61B) * 365 = 69.67

2012 (9.51B/50.67B) * 365 = 68.51

g. Days Sales Inventory = (Ending inventory/cost of good sold) x 365

2014 (8,670,000/47,464, 000) * 365 = 66.67

2013 (9,157, 000/ 47,594,000) * 365 = 70.21

2012 (9,318,000 / 47,792,000) * 365 = 71.16

h. Debt to Equity Ratio = Total liabilities/Total stockholders’ equity

2014 46,171,000/22,423,000 = 2.059

2013 42,447,000/26,898,000 = 1.578

2012 48,581,000/26,898,000 = 1.806

i. Times Interest Earned Earned = (Net income + Interest expense + Income Taxes)/Interest expense

2014 3,839,000 + 1,108,000 + 1,426,000 = 6,373,000

2013 4,816, 000 + 1,179,000 + 1,988,000 =7,983,000

2012 1,100,000 + 1,353,000 + 565,000 = 3,018,000

B. Performance Ratios

a. Asset Turnover = Net sale/Average total assets

2014 0.845 = 58,167, 000/68,796,000

2013 0.82= 57,080,000/69,501,000

2012 0.82 = 56,786,000/ 69,605,000

b. Return on Sales = Net income + Net-of-tax interest expense)/Sales

2014 0.199 = (5,265, 000 + 3,839,000)/ 47,464, 000

2013 0.244 = (6,804,000+4,816, 000)/ 47,594,000

2012 0.057 = (1,665,000+ 1,100,000)/ 47,792,000

c. Gross Margin Ratio = (Net Income - Cost of goods sold)/Net Sales

2014 (3,839,000 - 47,464, 000)/ 58,167,000 = -0.75

2013 (4,816, 000 - 47,594,000)/ 57,080,000 = -0.75

2012 (1,100,000 - 47,792,000)/ 56,786,000 = -0.82

d. Return on Assets = Net income + Net-of-tax interest expense)/Average total assets

2014 0.132 = (5,265, 000+ 3,839,000)/ 68,796,000

2013 0.167 = (6,804,000 + 4,816, 000)/69,501,000

2012 0.039 = (1,665,000+ 1,100,000)/ 69,605,000

e. Return on Equity = Net Income/Average stockholders’ equity

20143,839,000/ 22,423, 000 = 0.17

2013 4,816,000/ 26,898, 000 = 0.18

2012 1,100,000/20,877,000 = 0.0526

f. Average Interest Rate = Interest expense/Average total liabilities

2014 0.0213 = 983,000/46,171,000

2013 0.0259 = 1,101,000 /42,447,000

2012 0.0261 = 1,269,000/48,581,000

g. Book Value per Share = Shareholders’ equity of common shares/Number of common shares outstanding

2014 77.73 =71,359/918

2013 67.76 = 62,204/918

201268.32 = 62,726/918

h. Earning per Share = Net income/Average number per common share outstanding

2014 4560/918 = 4.97

2013 6190/ 918 = 6.74

2012 4820/ 918 = 5.25

i. Price Earning Ratio = Market price per common share/Earning per common share

2014 918 /4.97 = 184.7

2013 918/6.74 = 136.2

2012 918/5.25 = 174.9

j. Dividend Yield = Cash dividends per common share/Market price per common share

2014 4.01 = 19.92/4.97

2013 3.48= 23.46/6.74

2012 4.68 = 24.57/5.25

k. Dividend Payout = Cash dividends per common share/Earning per common share

2014 4.01 = 19.92/4.97

2013 3.48= 23.46/6.74

2012 4.68 = 24.57/5.25

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